Morgan Stanley Warns of Market Reality Check in Autumn as Optimism Faces Pressure

ME News reports that on August 29 (UTC+8), U.S. equities briefly regained risk appetite following NVIDIA’s earnings report, but the Jackson Hole speech quickly refocused market attention on interest rate pressures. The S&P 500 closed slightly lower on Friday, while the Nasdaq fell about 0.5%; however, both indices posted weekly gains, indicating that AI leaders’ earnings continue to support the broader market, though high-valued assets are becoming increasingly sensitive to policy signals. Bank of America’s Michael Hartnett team warned that although the U.S. bull market has continued to “ignore” geopolitical conflicts and the summer tech correction, a reality check may arrive in the fall. The bank believes the market is still in a “summer consensus,” with investors continuing to buy risk assets such as equities; however, once bond volatility, policy uncertainty, and political risks intensify, these optimistic positions will come under pressure. From a trading perspective, this means the market is shifting from “NVIDIA drives everything” to reassessing interest rates, fiscal policy, and valuations. AI profitability remains the core driver of U.S. equities, but if long-term yields rise again, growth stock valuations will face further compression. Bank of America therefore continues to recommend hedging against policy and fiscal risks with gold and commodities, awaiting a market repricing in the fall. (Source: BlockBeats)